For months economists have debated what recovery from the Great Recession will look like. The optimists predicted a V-shaped recovery with the job market rebounding as quickly as it had crashed. The pessimists anticipated an L-shaped recovery with recession-like conditions persisting in the job market well beyond the “official” end of the downturn. This dire prediction meant that no real recovery was in sight. Other economists have come down in the middle and claimed that we’re in a U-shaped recovery, albeit one “with a very real risk that the bowl part of the U may be extended.”
Indeed, the latest jobs report suggests that we’re stuck at the bottom of a U, with California’s job market neither getting much worse nor much better. Friday’s report showed that California lost jobs in July for the second month in a row, largely because tens of thousands of temporary positions related to the 2010 Census ended – a trend we described in a previous blog post. The addition of temporary Census positions made the job market look somewhat rosier earlier in the year, and their disappearance is now making it appear somewhat worse. Excluding Census-related positions, California has gained a very modest 54,300 jobs since December of last year.
With minimal hiring, California’s unemployment rate has essentially flat-lined, and the ranks of the long-term jobless continue to grow. In July, nearly 1 million Californians had been out of work for 27 weeks or more. This staggering statistic is particularly troubling because the odds of finding a job worsen the longer individuals go without work. National data show that individuals unemployed for a month or less are three times as likely to find employment as those who have been jobless for more than half a year. Given these odds, it’s not surprising that nearly 70,000 Californians gave up their job search and “dropped out” of the labor force in June and July. This was the first decline in the workforce this year, and it’s unclear whether it’s just a two-month setback or the beginning of another downward trend.
The latest jobs data clearly demonstrate that economic pain from the Great Recession remains a daily reality for millions of California’s workers and their families. Down at the bottom of the U – where the job market is still the weakest it’s been in decades – the difference between recession and recovery is hardly perceptible. As our friends at Sesame Street tell us, that U’s really got a hold on us.[youtube=http://www.youtube.com/watch?v=ws_vnXup7so&feature=search]
— Alissa Anderson